A report on motor insurance from the Financial Regulator shows that the average profit made on each policy fell in 2005 compared with the previous year.
Average surplus per policy for comprehensive policies fell by 23%, while the third party, fire and theft surplus dropped by 13%.
The report said the main reason for the fall was lower premiums being paid by motorists - 12% lower for comprehensive and 10% for third party, fire and theft.
The regulator's report found that, in 2005, the average cost per insurance claim fell by 6% for comprehensive and 16% for third party, fire and theft. But it added that accident frequency increased in 2005, continuing a trend which started in 2004 after sharp declines in the previous few years.
Consumer director Mary O'Dea said the results indicated that the Personal Injuries Assessment Board may be having a positive impact on the market, though its impact on costs was greater in third party, fire and theft policies, as these comprise a high proportion of personal injury related costs.
